Market Segmentation

This lesson covers AQA A-Level Business topic 3.3.3, focusing on market segmentation. You will study the different bases for segmentation — demographic, geographic, income, and behavioural — and evaluate the benefits and limitations of segmentation for businesses.

---

What Is Market Segmentation?

Key Definition: Market segmentation is the process of dividing a broad market into distinct subgroups (segments) of consumers who share similar characteristics, needs, or behaviours, so that a business can target each segment with a tailored marketing mix.

Rather than treating all consumers as identical, segmentation recognises that different groups of customers have different needs, preferences, and purchasing behaviours. By identifying and targeting specific segments, businesses can create products, pricing, promotions, and distribution channels that better match what each group wants.

---

Bases for Segmentation

1. Demographic Segmentation

Key Definition: Demographic segmentation divides the market based on measurable population characteristics such as age, gender, family size, ethnicity, religion, or life stage.